LOCAL ENTREPRENEURS AND DOZENS OF INVESTORS WIN!
LOCAL ENTREPRENEURS AND DOZENS OF INVESTORS WIN!
Liz Wilson/Ben Franklin Technology Partners
In 2006, Dan Bensur, Kevin Seeker and Bill Catania started a business around an idea to develop a mobile marketing loyalty program, or in other words, a way to redeem coupons from your smart phone. They had done their homework and knew that their target market of 25-35 year old consumers almost never used paper coupons, rarely joined loyalty programs that scanned plastic store cards, and relied on their mobile phones for most of their communication and information. They figured that retailers, who had experienced a decline in the use of paper coupons, would start lining up.
This story has a happy ending. But, even for seasoned business professionals, getting into a new market with a new product is a risky, expensive undertaking. Startups all struggle with the same problem. Without any sales on the books and no assets other than maybe ownership of intellectual property, it’s difficult, if not occasionally impossible, to attract the private or institutional investors you need to keep the lights on, your employees paid, and the product development moving forward. This is when many startups meet Ben Franklin Technology Partners, www.cnp.benfranklin.org, a state funded Program that has been investing in tech-startups and small, innovative manufacturers for more than thirty years.
In 2007, the M-Dot Network team applied for a seed investment from the Ben Franklin Program to help complete their platform. M-Dot was gaining significant traction and planned to partner with large chain grocery stores to test and roll out their product. They knew that strategic partnerships with not just Ben Franklin, but also key industry players, would help contribute to the growth and success of the company. In 2010, M-Dot gained the industries’ recognition by winning the Amazon Startup Challenge. That year, Amazon’s global challenge received 1,500 applications from 22 countries across the globe. The company, which took home $100,000 in cash and services, was selected as the winner based on a variety of criteria which included originality and creativity, likelihood of long-term success, and how well the business addressed a need in the marketplace.
With its financial situation becoming more secure and the platform completed, the team began considering a plan to put M-Dot on the radar screen as either a merger or acquisition candidate. In February of 2011, M-Dot signed a letter of intent with a company headquartered in Winston-Salem, North Carolina, Inmar Inc., to work toward an acquisition of the company.
With more than 4,200 employees around the world, Inmar is a recognized leader in coupon processing as well as reverse logistics, and at the time had more than 1,200 retail and consumer product manufacturer clients. M-Dot was acquired by Inmar later that year, and the investors received a combination of cash and Inmar shares. But, there’s icing on this cake. Dozens of investors, along with Ben Franklin Technology Partners, will see those Inmar shares convert to cash. The CEO of Inmar, David Mounts, recently announced that ABRY Partners, a Boston equity group, agreed to buy out the current majority owner of Inmar, New Mountain Capital.
Congratulations to Dan Bensur and his team as well as the investors who bet on M-Dot. It takes patience and guts to be on either side of the coin. When a local entrepreneur wins, we as a community all win. Successful entrepreneurs are more likely to try another startup, and successful investors are likely to invest again. And, that’s the real happy ending to this story.
For more information on Ben Franklin Technology Partners, contact Liz Wilson at lizwilson@psu.edu/898-6650 or see the website, http://www.cnp.benfranklin.org
For more information on MDot contact Dan Bensur at DBensur@Bensur.com
